Answered: Using the given situations, compute for…

Using the given situations, compute for the future value at the end of term of each scenario. 1. Your mother invested Php18 000 in government securities that yields 6% annually for two years.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 6MC: You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years....

See similar textbooks

Related questions

Q: You have the option of investing in a friend's mortgage fund, for an anticipa yearly return of 13%…

A: Investment amount = $200,000Yearly returns = 13%Number of years = 5 years

Q: Your sister paid $10,000 (CF at t = 0) for an investment that promises to pay $750 at the end of…

A: The objective of this question is to find the expected rate of return on an investment. The…

Q: You have a chance to buy an annuity that pays Php2,500 at the end of each year for 3 years. You…

A: As per the given information: Annual payment = Php2,500Interest rate = 5.5%Period - 3 years To…

Q: You have just received a windfall from an investment you made in a friend's business. She will be…

A: The Present Value refers to a concept that states the discounted value or say value at today's time…

Q: You plan to invest $1,200 at the end of year 1, $2,000 at the end of year 2, and $3,700 at the end…

A: Given data; Amount deposited at the end of year 1 = $1200 Amount deposited at the end of year 2 = $…

Q: You have just received a windfall from an investment you made in a friend's business. She will be…

A: Present value is the discounted value of all the future cash flows.Future value is the compounded…

Q: An investor paid $58,000 for an investment. He will get $5,780 for every two years (forever). What…

A: given, initial investment = $58,000 return for every two years = $5780

Q: Nora is thinking of investing an amount of P30,000 for 2 12 years. Find the future value based on…

A: Investment = 30,000 N = 2.5 years

Q: You have just received a windfall from an investment you made in a friend's business. She will be…

A: We need to use the following equation to calculate present and future value FV=PV(1+i)n where FV…

Q: Sam Hart decides to invest $70,000 in a fund that will earn 6% annual interest, compounded…

A: Time value of money is a concept of payment of interest for using money. Under this concept we…

Q: You are told that if you invest $11,100 per year for 19 years (all payments made at the beginning of…

A: Present Value (PV) is current value of amount to be transacted in future. It is computed…

Q: Your sister paid $10,000 (CF at t = 0) for an investment that promises to pay $750 at the end of…

A: The expected return is the estimation of profit or loss that an investor determines from his…

Q: Your brother has asked you to help him with choosing an investment. He has OMR 5000 to invest today…

A: Bank Certificate of Deposit (CD) is an investment instrument offered by banks. Here the interest…

Q: Compute the present value of each scenario. Show the complete solution. 1. Your mother is expecting…

A: The present value is calculated as per the concept of time value of money. Here, the future value is…

Q: You expect to receive a payout from a trust fund in 3 years. The payout will be for $11,000. You…

A: Receipt in 3 years (I) = $11,000 Interest rate (r) = 0.065 Future value (FV) = $19,000 Period for…

Q: What amount is needed to invest today by a man if he wants to receive a quarterly cash out of Php…

A: Quarterly payment (P) = Php 49,623 Period = 7 Years Quarterly payments (n) = 7*4 = 28 Interest rate…

Q: An investor paid $58,000 for an investment. He will get $5,780 for every two years (forever). What…

A: Option C. 4.86%

Q: You need $25,356 at the end of 9 years, and your only investment outlet is an 9 percent long-term…

A: Present value is an estimate of current value of future cash flows for a specific period of time at…

Q: An investment promises to pay $6,000 at the end of each year for the next three years and $4,000 at…

A: Question 1 is the case of ordinary annuity while question 2 is the case of an annuity due as the…

Q: You have RM 5,000.00 you want to invest for the next 45 years until retirement. You are offered an…

A: Future value = Present Value * (1+r)^n Where, r = rate of interest n = no. of compounding period…

Q: You have just received a windfall from an investment you made in a friend's business. She will be…

A: Present value shall be computed by discounting the cash flows at the required rate. Future value…

Q: You have just received a windfall from an investment you made in a friend's business. She will be…

A: First payment (P1) = $13703 P2 = $27406 P3 = $41109 r = 4.2%

Q: You expect to receive a payout from a trust fund in 4 years. The payout will be for $13,600. You…

A: Number of years it will take for the account to be worth $22900 is calculated in excel below

Q: An investment promises to pay $5,000 at the end of each year for the next four years and $3,000 at…

A: Annuity payment is the series payment of a certain amount for a particular period of time. Under…

Q: A person has Php200,000.00 which he plan to put in an investment for 3 years. He is choosing between…

A: The investment with the higher future value will be the better one.

Q: You have just received a windfall from an investment you made in a friend's business. She will be…

A: Present Value is the current value of the future stream of cash flows discounted at the specified…

Q: Sidney makes 10 annual deposits of 5,500 each into an investment account. The interest rate is 6%…

A: Investments are the ways through which money is saved in various financial instruments and accounts…

Q: You have just received a windfall from an investment you made in a friend's business. She will be…

A: Year 1 Cash flow = $26016 Year 2 Cash flow = $52032 Year 3 Cash flow = $78048 Interest rate = 0.114…

Q: An investment promises to pay $7,000 at the end of each year for the next six years and $3,000 at…

A: In the given case, an investment will pay $7,000 at the end of each year for the next six years and…

Q: At the end of each of the next 8 years, you planto put $25,000 of your annual salary in thebank. If…

A: The objective of this question is to calculate the present value of the planned savings stream and…

Q: Your mother is expecting to get ₱18,000 in two years’ time after investing in government securities…

A: The present value is the value of the sum received at time 0. It is the current value of the sum…

Q: TVM calculator, compare the following if the investment pays 7%/a compound annually and payments are…

A: Future value of investment include the compound interest and payment made for the future.

Q: Bill is considering investing $450 at the end of each month in a fixed incone instrument. He will…

A: The answer is in the explanation.Explanation:Option C. 11.6% FV=P×((1+r)n−1/r)FV=$27,000 (future…

Q: Consider that Adjovi Hevi placed GHS 12,525 in Mutual Fund for the next 15 years. She is to earn a…

A: The mutual fund is an investment avenue that pools funds from individual investors and invests such…

Question

Using the given situations, compute for the future value at the end of term of each scenario. 1. Your mother invested Php18 000 in government securities that yields 6% annually for two years.

Video Video

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Compute the present value of each scenario. Show the complete solution. 1. Your mother is expecting to get Php18 000 in two years’ time after investing in government securities that yield 6% annually.
An investment promises to pay $6,000 at the end of each year for the next three years and $4,000 at the end of each year for years 4 through 7. Use Table II and Table IV or a financial calculator to answer the questions. Round your answers to the nearest cent. If you require a 11 percent rate of return on an investment of this sort, what is the maximum amount you would pay for this investment?$ Assuming that the payments are received at the beginning of each year, what is the maximum amount you would pay for this investment, given a 11 percent required rate of return?$
Compute the annual interest, total interest and the amount to be received or paid at the end of the term for each scenario using a simple interest assumption: 1. You invested P28,000 in government securities that yields 5% annually for three years. 2. Your mother obtaineda car loan for P900,000 with an annual rate of 12% for 5 years. 3. You deposited P10,000 from the savings of your daily allowance in a time deposit account with your savings bank at a rate of 1.5% per annum. This will mature in 6 months.
An investment promises to pay $5,000 at the end of each year for the next four years and $3,000 at the end of each year for years 5 through 8. Use Table II and Table IV or a financial calculator to answer the questions. Round your answers to the nearest cent. If you require a 9 percent rate of return on an investment of this sort, what is the maximum amount you would pay for this investment?$ Assuming that the payments are received at the beginning of each year, what is the maximum amount you would pay for this investment, given a 9 percent required rate of return?$
At the end of each of the next 8 years, you planto put $25,000 of your annual salary in thebank. If the annual interest rate is 3%, what isthe present value of this planned savingsstream? What will the balance in your bankaccount be at the end of the 8 year period?
An investment promises to pay $7,000 at the end of each year for the next six years and $3,000 at the end of each year for years 7 through 10. Use Table II and Table IV or a financial calculator to answer the questions. Round your answers to the nearest cent. If you require a 15 percent rate of return on an investment of this sort, what is the maximum amount you would pay for this investment?$ Assuming that the payments are received at the beginning of each year, what is the maximum amount you would pay for this investment, given a 15 percent required rate of return?$
Sam Hart decides to invest $70,000 in a fund that will earn 6% annual interest, compounded semiannually. How much will his investment be worth in three years? Draw a timeline to illustrate the problem. What is the future value of your investment? (Use the present value and future value tables, a financial calculator, a spreadsheet or the formula method for your calculations. If using present and future value tables or the formula method, use factor amounts rounded to five decimal places, X.XXXXX. Round your final answer to the nearest cent, $X.XX.)
Nora is thinking of investing an amount of P30,000 for 2 12 years. Find the future value based on the following investments: a. Simple interest of 8.5% b. 8.5% compounded annually c. Which investment is better? Justify your answer.
Steffi Derr expects to invest $5,000 annually that will earn 10%. How many annual investments must Derr make to accumulate $92,656 on the date of the last investment? (PV of $1. FV of $1. PVA of $1, and FVA of $1) Note: Use appropriate factor(s) from the tables provided. Round "Table Factor" to 4 decimal places. Future Value Annuity Payment Table Factor Annual Investments investments
A person has Php200,000.00 which he plan to put in an investment for 3 years. He is choosing between two investments. Investment A credits 5% interest compounded monthly, while investment B credits 5.3% interest compounded quarterly. Which investment is better?
What amount is needed to invest today by a man if he wants to receive a quarterly cash out of Php 49623 for 7 years with an interest rate of 7% compunded quarterly.
You have RM 5,000.00 you want to invest for the next 45 years until retirement. You are offered an investment plan that will pay you 6 percent per year for the next 15 years and 10 percent per year for the last 30 years. 1) Draw a graph that illustrates the relationship between interest rates and the present value of RM1,000.00 to be received in one year.2) Compute the amount you will have at the end of the 45 years.3) Calculate the amount you would have if the investment plan pays 10 percent for the first 15 years and 6 percent per year for the next 30 years.